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A Look At The Fallout From California’s Legalization Regulations

Authorities from the Golden State have outlined California’s legalization regulations. These new regulations governing the legal cannabis market are to be officially instated on January 1.

Jointly drawn up by the Department of Health, Department of Food & Agriculture and the new Bureau of Cannabis Control, the regulations are meeting with some trepidation from the Golden State’s traditional cannabis sector.

The most controversial issue?

The regulations include no limit on the number of licenses a single grower can hold. Or the total acreage that one can farm.

Spectre Of Corporate Cannabis

A Look At The Fallout From California's Legalization Regulations

This has inflamed fears that agricultural business could quickly overwhelm local producers and dominate the market.

“Frankly, this could be a catastrophe,” Hezekiah Allen, executive director of the California Growers Association, told the San Francisco Chronicle. “It creates a clear cut-and-dried advantage based on how much money a business has.”

State Senator Scott Wiener echoed these concerns. “By not limiting the amount of land that can be cultivated by any one operation, we are basically inviting mega industrial-scale operations into the state,” the San Francisco Democrat told the Chronicle. “It will squeeze out the small farmers that have been at the forefront of the industry for many, many years.”

With a touch of cynicism, the Chronicle recalled Lt. Governor Gavin Newsom.

He was a big backer of the 2016 voter initiative for legalization. At the time, he said that there would be no “new gold rush” of corporate cannabis. But “Newsom, who is running for governor, appears to be fine now with allowing for big growers.”

California’s Legalization Regulations and Equity

A Look At The Fallout From California's Legalization Regulations

Then there are other controversies about California’s legalization regulations. Specifically, about permits.

Oakland city officials are reviewing 255 applications from individuals seeking permits to operate cannabis cultivation, distribution or sales outlets. Meanwhile, a grandfather clause protects the city’s eight medical marijuana dispensaries. That is, they don’t have to go through the application process. Although, in accordance with California’s legalization regulations, they will still need state licenses to operate as of January 1.

Oakland’s ordinance stipulates half of all permits must go to people who qualify under the city’s Equity Permit Program—aimed at addressing the issues of social and racial justice around the cannabis economy.

Here are those who qualify for “equity permits:” Those who have a conviction of a marijuana-related offense in Oakland. Those who earn an income less than 80 percent of the city average. Or have lived at least 10 years in an Oakland neighborhood that saw a high number of cannabis arrests.

Of the city’s 255 applications, 129 are from equity applicants.

But the equity program is meeting with some dissent from the industry. Robert Selna, an Oakland-based land-use attorney who represents cannabis enterprises, told the Chronicle: “The city is choosing winners and losers. If you are an equity applicant…you’re a winner.”

Sacramento councilmembers are also considering an equity project.

Affluent Marin County, where equity is less of a concern, has meanwhile bucked its hippie reputation and rejected all 10 applicants so far, leaving many to wonder if legal cannabis will now be allowed there at all.

Reefer Madness In San Francisco?

A Look At The Fallout From California's Legalization Regulations

San Francisco has also seen an unlikely anti-cannabis backlash. Plans by Apothecarium company (with dispensaries in the city’s Castro, Marina and SoMa districts) to open an outlet in the Sunset neighborhood were scuttled in October when the Board of Supervisors upheld an appeal filed against the business.

“In the eyes of federal law, the Apothecarium is no different from a street-level crack dealer,” said Ray Hacke, a lawyer for the conservative Pacific Justice Institute, speaking to the Chronicle. Some have accused The Institute of playing on the fears of traditional residents in the heavily Asian American community. Their goal was alleged to mobilize them against the dispensary.

Supervisor Katy Tang, who represents the Sunset and ultimately voted with the 9-2 majority against the dispensary, also had some harsh words for the Pacific Justice Institute.

“I know you’ve latched onto many of the battles that have happened in the city, and particularly in the Sunset. Please stay out of it,” Tang said.

In another move that has disappointed the local industry, San Francisco’s Muni transit system has banned cannabis ads from its trains and stations.

Toxic Threat From Wildfires Seen

A Look At The Fallout From California's Legalization Regulations

Finally, the countdown to legalization and California’s legalization regulations comes at an inauspicious moment, with many growers already hard hit by the wildfires that have devastated Northern California this fall.

In addition to much of the harvest being lost, Mendocino-based Project CBD is raising fears that much of what was saved may now be contaminated.

In a statement, Project CBD said it, “hopes that some lab in California will validate methods and offer tests to detect the major contaminants that result from the wildfires. We expect these will include benzene, toluene, benzopyrenes, and heavy metals, as well as some dioxins and polychlorinated biphenyls.”

Not exactly favorable publicity for the nascent legal industry.

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